Many Ways to Calculate a "Living Wage"

A couple of left-leaning economic policy experts took issue with an MIT study we cited in Morning Fizz last week, which concluded that Washington state's minimum wage ($9.19 last year, increasing to $9.32 this year) was actually higher than the state's "living wage"—that is, the level someone would need to make to support him- or herself in a particular state. In Washington, the study (cited in the Huffington Post) concluded, the minimum wage is just over 101 percent of a "living wage."

Both city council member Kshama Sawant and Mayor Ed Murray support increasing the minimum wage in Seattle—Sawant to $15 an hour, and Murray has appointed task force to come up with a recommendation by April for increasing the minimum wage.

However, Working Washington, a progressive economic coalition (ha, we've been making a little fun of them in Fizz lately), points out that the definition of "living wage" the widely-cited study used assumed a single-person household (something the HuffPo story glossed over), with no children or other dependents.

According to the living wage calculator the story cites, the "living wage" for a single person with one child jumps to $19.49 an hour (in contrast, it's $13.89 for two adults without a kid, largely because the cost of living doesn't include the cost of child care.

Even that, Working Washington's Sage Wilson points out, other groups that calculate "living wages" have come up with much higher estimates for what an individual or family needs to make to survive.

For example, the Economic Policy Institute’s Basic Family Budget calculator cites a living wage of $25.44 living wage for one adult and one child, and the Self-Sufficiency Standard created by the UW School of Social Work’s Center for Women’s Welfare says a living wage for one adult with no savings is $14.10 an hour.

Meanwhile, the Alliance for a Just Society just released a report concluding that the living wage for a single full-time worker is $16.04; AJS director LeeAnn Hall says the MIT study calculated a "survival wage," not an acual "living wage," which would provide "a better standard of living that allows workers and their families to move beyond living paycheck-to-paycheck. For example, we assume a one-bedroom apartment for a single adult rather than a studio, but no smart phone or cellphone, Internet, or cable."

Indeed, the MIT numbers assume a monthly rent of just $645, along with food expenses of just $60 a week, $107 in monthly medical costs (pretty low if you don't have employer-provided health care, and forget about it if you have emergency medical expenses) and less than $20 a week for miscellaneous expenses.